Offer to Hemophiliacs With H.I.V. Is Set

By BARRY MEIER

Published: April 19, 1996

Four producers of blood-clotting products that are said to have infected thousands of hemophiliacs in the United States with the virus that causes AIDS said yesterday that they planned to offer $600 million to affected individuals and their families in a bid to resolve litigation against the companies.

The companies, Bayer A.G. of Germany; Baxter International Inc.; Rhone-Poulenc Rorer Inc., a unit of Rhone-Poulenc S.A. of France, and the Alpha Therapeutic Corporation, a unit of the Green Cross Corporation of Japan, plan to approach lawyers for the plaintiffs today with the proposed settlement, which would include an additional $40 million to cover legal fees and administrative costs, said Thomas E. Kerr, assistant general counsel of Bayer.

We believe that it is time to put an end to this protracted litigation and to make payments to persons who have been victims of this tragedy," Mr. Kerr said. In making the offer, the companies denied any liability.

The proposal drew a mixed reaction. One member of Congress applauded it, but some hemophiliacs dismissed it as inadequate.

Federal authorities have estimated that about half the hemophiliacs in this country, or about 8,000 people, were infected in the 1980's with the human immunodeficiency virus, which leads to AIDS, through contaminated blood-clotting substances known as Factor VIII and Factor IX. The clotting substances were derived from the blood of hundreds of donors and then concentrated to treat hemophilia.

Hemophiliacs and their lawyers have charged that the companies were negligent in making the products; the companies deny that. Lawsuits against the producers have been largely unsuccessful because blood is not legally considered to be a product. As a result, manufacturers are shielded from certain types of liability claims.

Under the companies' offer, settlement funds would be available to hemophiliacs who became infected with H.I.V. after they received a blood-clotting substance, Mr. Kerr said. Spouses and children who became infected as a result of contact with such a person would also qualify, as would the estates of hemophiliacs who died from such infections, he added.

Mr. Kerr said that the Federal Centers for Disease Control had estimated that there were now about 6,000 hemophiliacs infected with H.I.V. in the United States, though other groups have said that the number is higher. If the figure was correct, payments would equal about $100,000 to each affected hemophiliac. But the amount would be reduced if family members and heirs of hemophiliacs who had died filed claims.

Representative Porter J. Goss, a Republican of Florida, the sponsor of a bill to provide Federal relief to affected hemophiliacs, praised the settlement offer.

"This is a giant first step in recognizing that there are victims who deserve compensation," he said. "It remains to be seen whether it will be enough."

Others, however, were not pleased. Dana Kuhn, a clinical counselor at a hospital in Richmond, said that he had been infected with H.I.V. in 1983 after a single blood-clotting treatment. His problem was not discovered until 1987, he said, by which time he had infected his wife, who, he said, subsequently died of AIDS.

Mr. Kuhn, who is 43, said that the offer might be acceptable to many hemophiliacs who are not able to show whose product infected them, but that he believed he had a stronger legal case.

"To someone who took factor concentrate once and whose wife died and left him with a 3-year-old and 6-year-old, this is an insult," he said.

In Japan, where a joint Government-industry settlement fund was recently set up to compensate hemophiliacs infected with H.I.V. by contaminated blood-clotting substances, the settlement was $420,000 a person. Mr. Kerr said the higher figure reflected the cost of living in Japan, as well as the Government involvement.

Mr. Kerr said the companies would ask plaintiffs' lawyers to indicate by late next month whether at least 95 percent of their clients would participate in the settlement plan. If so, the companies and representative plaintiffs' lawyers would then file a class-action lawsuit to settle claims. Mr. Kerr said the companies might withdraw from the agreement if more than 100 people decided to opt out of it.

Plaintiffs' lawyers have been stymied in their efforts to maintain a class action against the producers of blood-clotting substances.